Sunday, September 05, 2010

Sunday Morning Rebuttal

I think QuakerJono deserves a post answer to his comment on my previous post.Who else could take an informed critique of current health insurance practices and a plea for insurance coverage of proactive treatments for chronic conditions, which prove to be more effective and cheaper, possibly even avoiding the condition in the first place, and reduce it to Cuban-style communism?

Someone with a broader view of these things. :)

First, as someone who works with health insurance organizations, I can tell you right off the bat that they would sell their grandmothers into prostitution to get people to engage in proactive treatments if it would reduce the amount of money they have to pay out on claims.

Sweeping statements about the cost-saving potential of prevention, however, are overreaching. Studies have concluded that preventing illness can in some cases save money but in other cases can add to health care costs. For example, screening costs will exceed the savings from avoided treatment in cases in which only a very small fraction of the population would have become ill in the absence of preventive measures. Preventive measures that do not save money may or may not represent cost-effective care (i.e., good value for the resources expended). Whether any preventive measure saves money or is a reasonable investment despite adding to costs depends entirely on the particular intervention and the specific population in question. For example, drugs used to treat high cholesterol yield much greater value for the money if the targeted population is at high risk for coronary heart disease, and the efficiency of cancer screening can depend heavily on both the frequency of the screening and the level of cancer risk in the screened population.

To see why, let's use an example. Your cholesterol levels are too high, which increases your odds of catastrophic and expensive heart disease. What are your choices?

1) Eat less, exercise, and lose weight

2) Take a pill for it.

So let's see; from your perspective, you either can eat less, exercise, and lose weight, all of which will cost you more in time and money and deprivation and increase the likelihood that you won't do any of them, or you can take a pill for it.

From the insurance company's perspective, they can pay for you to have better food, have access to a gym or whatnot, and to lose weight, none of which they are certain you will actually do, or pay for a simple pill that has been scientifically proven to lower your blood cholesterol and requires you to do nothing more than open a bottle once a day.

That's problem one.

The second problem comes in the fact that, if one is actually going to do preventative medicine, one actually has to make it worth peoples' while by rewarding those who do it and punishing those who do not. The best and most effective method in that regard has been shown to be premium discounting -- as in, those who follow healthy practices pay lower premiums than those who continue to engage in unhealthy practices.

Second, the bills would ban insurers from charging differing premiums based on the health of their customers. Again, that's understandable for folks with diabetes or cancer. But the bills would bar rewarding people who pursue a healthy lifestyle of exercise or a cholesterol-conscious diet. That's hardly a formula for lower costs. It's as if car insurers had to charge the same rates to safe drivers as to chronic speeders with a history of accidents.

So let's summarize:

1) The insurance companies cannot reward you for doing something; they can only pay for you doing it.

2) They can either pay more for you to do something which requires a significant amount of time, effort, and commitment on your part and has unpredictable results in terms of lowering your cholesterol, or less for something that requires no effort on your part and which has scientific trials showing predictable results in lowering cholesterol.

In short, if the goal is to lower your cholesterol to prevent heart disease, the pill IS the more effective and cheaper treatment.

What this all boils down to is that, ultimately, you can't make people do the right thing; you can only, as we used to say in horse training, make the right thing easy and the wrong thing difficult.

And what the whiny article cited was about was avoiding that basic fact and making the argument that the whiner's stepfather wouldn't have eaten himself to death if the United States had single-payer government-controlled universal health insurance.

The way around this is pretty straightforward. Repeal community rating and allow health insurance companies and group plan owners like employers to set premium costs based on likelihood of payout, similar to what car insurers do. Give people who elect to follow healthy lifestyle proscriptions decreased premiums, and charge more for people who want to engage in lifestyle behaviors that are detrimental to health.

But all of that is antithetical to the basic principles of ObamaCare that the whiny article was trying to push.